Ludwig Von Mises
Ludwig Von Mises was born in 1881 in Austro- Hungarian city of Lemberg. Ludwig's father was a successful engineer, which is where Ludwig found his inspiration to work hard. When he turned nineteen Mr. Mises enrolled in the University of Vienna. Here with the great learning atmosphere of the University he studied economic greats Carl Menger, who is the founder of the Austrian school and also attended the seminar of the great professor at the school Eugen Von Bohm-Bawerk. Ludwig Von Mises received his doctorate at age 27.In 1912 after receiving his PhD Mises started his first piece of work, The Theory of Money and Credit. Mises, unlike other Austrian economist that came before him, which followed the classical school in separating money from the rest of the economy, and analyzed it in separate theoretical terms. Mises argued that just as the price of any commodity is determined by supply and demand, so is the purchasing power of money, it's price. Mises showed in his work that prices increase faster or slower than the money supply, the amount and speed of price increases depending on people's desire to hold cash. He also argued that because prices increase only relative to one another, monetary inflation br
What is to be done to stop the cycle? Mises argued that because money originated as a market commodity, not by government edict or social contract, it should be returned to the market. Banking should be treated as any other industry in a market economy, and be subject to competition. The currency ought to be tied to gold, its originating commodity, through free convertibility. In Socialism, which predicted the breakdown of the communist experiment, Mises stated that socialism could not function in an industrial economy because there would be no market for capital goods and therefore no price system to calculate profit and loss. The result would be chaos and stagnation. ings about redistribution of wealth, from savers and earners to banks and government and its connected interested groups. Even more damaging are the business cycles of booms and busts that monetary inflation causes. In broad outline, when government inflates, it lowers the interest rate below the proper market level, which depends on saving. The artificially low interest rate misleads businesses onto making uneconomic investments and creates an inflationary boom. When the credit expansion slows or stops, investments errors are revealed and bankruptcies and unemployment result. Central Banks like Federal Reserve will inevitable create the business cycle. Even though Mises had built a reputation for himself
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Approximate Word count = 933
Approximate Pages = 4 (250 words per page double spaced)
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